Barry's Brewpub is considering hiring more brewmasters.A pint of brew sells for $3.The market wage of a brewmaster is $150 per day.Assuming that the market for beer is perfectly competitive,Barry's Brewpub will hire another brewmaster only if Barry believes that the new brewmaster will:
A) produce the same number of pints per day as the last brewmaster hired.
B) produce 50 or more pints per day.
C) raise average production to 50 or more pints per day.
D) increase the marginal product by $150 per day.

Question

Quizplus · Accepted Answer

Barry's Brewpub will only hire another brewmaster if the additional revenue generated from selling the extra pints brewed by the new hire can cover the cost of hiring the brewmaster. If the market wage of a brewmaster is $150 per day, then the new brewmaster must produce at least 50 pints per day ($150 divided by $3 per pint) in order to cover their cost. Therefore, the best choice is B: produce 50 or more pints per day.

Barry's Brewpub Is Considering Hiring More Brewmasters